Correlation Between Flow Capital and DWS Municipal
Can any of the company-specific risk be diversified away by investing in both Flow Capital and DWS Municipal at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Flow Capital and DWS Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flow Capital Corp and DWS Municipal Income, you can compare the effects of market volatilities on Flow Capital and DWS Municipal and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Flow Capital with a short position of DWS Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flow Capital and DWS Municipal.
Diversification Opportunities for Flow Capital and DWS Municipal
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flow and DWS is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Flow Capital Corp and DWS Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DWS Municipal Income and Flow Capital is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Flow Capital Corp are associated (or correlated) with DWS Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DWS Municipal Income has no effect on the direction of Flow Capital i.e., Flow Capital and DWS Municipal go up and down completely randomly.
Pair Corralation between Flow Capital and DWS Municipal
If you would invest 937.00 in DWS Municipal Income on October 29, 2024 and sell it today you would earn a total of 8.00 from holding DWS Municipal Income or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flow Capital Corp vs. DWS Municipal Income
Performance |
| Timeline |
| Flow Capital Corp |
| DWS Municipal Income |
Flow Capital and DWS Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flow Capital and DWS Municipal
The main advantage of trading using opposite Flow Capital and DWS Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flow Capital position performs unexpectedly, DWS Municipal can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in DWS Municipal will offset losses from the drop in DWS Municipal's long position.| Flow Capital vs. Guardian Capital Group | Flow Capital vs. Urbana | Flow Capital vs. Princeton Capital | Flow Capital vs. Blackhawk Growth Corp |
| DWS Municipal vs. Carlyle Group | DWS Municipal vs. Blue Owl Capital | DWS Municipal vs. TPG Inc | DWS Municipal vs. Patria Investments |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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